Receiving an offer, or multiple, on your house is an exciting feat! You have consulted with your Realtor, chose the best offer, and signed on the dotted line.
However, a better offer comes in right after. What can be done about this if anything? Here is what home sellers should know:
When is a sale final?
Up until a contract is signed by both parties any other offers may be considered and accepted.
However, once both parties have signed the contract the deal is locked in and legally binding.
Sellers need to be absolutely sure of an offer before they commit. Read over the purchase agreement and any counteroffers in detail with your real estate agent.
Do not feel like you need to jump on the first offer you receive if there is a possibility that you could get a higher offer.
A provision can even be included on the listing that states “best and final offers due by such and such date and time”.
That will give you time to thoroughly look overall and any counteroffers.
You can even add a provision to the purchase agreement that will require the buyer to match or exceed any other incoming offers.
Also, keep in mind that contingencies can be put in place. These can be obligations that need to be met by the buyer for a sale to go through. Think home inspection deadlines, home appraisal requirements, and loan approval. If they fail to meet these contingencies, the seller has a right to cancel the agreement and accept another offer.
If you are under contract with a buyer, you are still allowed to accept what are referred to as backup offers.
These offers essentially get placed into a “queue” if for any reason the current contract needs to be canceled.
These are good to have in place in case the current buyer’s financing falls through or they are asking for repairs and contract addendums the seller does not agree to.
Just as accepting the initial offer, you also want to be careful in choosing backup offers.
As soon as the initial contract falls through, the next backup offer in line becomes legally binding.
Additionally, by having backup offers in place, your current buyer will become more committed to the purchase and less likely to stall over repairs and smaller items.
Also, keep in mind you do not have to accept back up offers and will still have the option to put your home back on the market if the deal falls through. So, only accept backup offers if they are substantial offers and not just because they are there.